Deepak Nitrite Limited — Q1 FY26

Deepak Nitrite Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=r685uK3XaGA Published: 9 months ago

0:00 Ladies and gentlemen, good day and welcome to the Deepak Night Trade Q1 FIR26 earnings conference call hosted by IFL Capital Services Limited. As a 0:09 9 seconds reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:18 18 seconds during the conference call, please signal an operator by pressing start and zero on your touchstone phone. At the outset, I would like to clarify that certain statements made or discussed on 0:26 26 seconds the conference call today may be forward-looking in nature and a disclaimer to this effect has been included in the investor communication shared with you earlier. The results 0:35 35 seconds documents have been shared with you earlier and have been also posted on the company's website. Please note that this conference is been recorded. I now hand 0:42 42 seconds the conference over to Mr. Anjit Surumala. Thank you and over to you sir. 0:48 48 seconds Thank you Aarat. Good afternoon everyone and thank you for joining us on Deepak Might's Q1 FI26 earnings conference 0:55 55 seconds call. Today we have with us Mr. Malik Ma executive director and CEO, Mr. Sanjay Upadada, director finance and group CFO 1:04 1 minute, 4 seconds and Mr. Somar Nandanda, CFO of Deepak Netite Limited. We will begin the call with opening remarks from the management team followed by an interactive Q&A 1:12 1 minute, 12 seconds session. To begin, Mr. Mr. Malik Ma will share views on the opening performance, operating performance and the growth plans of the company followed by Mr. 1:22 1 minute, 22 seconds Sanjay Upady who shall take us through the financial and segmental performance. 1:26 1 minute, 26 seconds I now invite Mr. Ma to share his uh opening comments. Thank you and over to you sir. 1:34 1 minute, 34 seconds Hello, good afternoon everybody and a warm welcome to you on Deepak Nitrite's Q1 FY26 earnings conference call. 1:43 1 minute, 43 seconds Our results documents were shared with you earlier and I hope you've had the opportunity to glance through them. I will initiate by briefly taking you 1:52 1 minute, 52 seconds through the financial and operational highlights for the first quarter ended 30th June 2025. 1:59 1 minute, 59 seconds Mr. will then present you with a financial overview during the period under review. And following this, we'll open the forum for Q&A. 2:08 2 minutes, 8 seconds So as we begin uh 2020 uh FY26, Deepak Nitride remains steadfast in 2:16 2 minutes, 16 seconds navigating a complex global business environment. The past several months have been marked by a confluence of challenges that have significantly affected the industry. 2:27 2 minutes, 27 seconds Slower than expected recovery in some agrochemical intermediates has stifled growth while continued over supply from 2:34 2 minutes, 34 seconds China has impacted the pricing. These headwinds coupled with fairly fast evolving geopolitical complications have compounded the complexities. 2:44 2 minutes, 44 seconds A strong business fundamentals underpinned by an import substitution strategy, expansion initiative, 2:51 2 minutes, 51 seconds both capacity augmentation as well as new projects, process optimization and commitment to innovation and sustainability have provided us some resilience in this platform. 3:03 3 minutes, 3 seconds Despite these challenges, we foresee a pickup in demand trajectory driven by improving market dynamics. The 3:11 3 minutes, 11 seconds commissioning of new projects and expanding product applications. 3:15 3 minutes, 15 seconds Our focus on accelerated execution, enhanced project product mix, digital transformation, expansion into newer 3:23 3 minutes, 23 seconds markets and product variants positions us to capitalize on the evolving landscape. 3:30 3 minutes, 30 seconds We remain confident that Deepak Nitrite will continue to deliver value while contributing to India's larger vision of self-reliance and sustainable industrial growth. 3:40 3 minutes, 40 seconds Deepak Nitrite has solidified its position as one of India's leading chemical intermediate producers. 3:46 3 minutes, 46 seconds Recognized globally for responsible manufacturing and a supplier of choice. 3:51 3 minutes, 51 seconds I our diverse portfolio serves multiple industries underpinned by a philosophy of responsible chemistry emphasizing 3:59 3 minutes, 59 seconds sustainability, transparency and ethical business practices guided by an experienced leadership and 4:07 4 minutes, 7 seconds deep technical uh expertise. We continue to strive towards driving operational excellence and long-term value appreciation. 4:16 4 minutes, 16 seconds Our performance this quarter was sustained by volume growth across our diverse product portfolio 4:24 4 minutes, 24 seconds supported by a notable recovery in demand from non-aggrochemical applications and also the initial success from 4:32 4 minutes, 32 seconds certain cost optimization initiatives in the advanced intermediate segment. 4:37 4 minutes, 37 seconds Although agrochemical agrochemical intermediates are experiencing subdued global demand, we project a recovery in 4:45 4 minutes, 45 seconds the upcoming period. The phenolic segment witnessed steady demand with better realizations backed by the 4:52 4 minutes, 52 seconds bottlenecking and capacity augmentation initiatives. Our focus on cost management continues. 4:59 4 minutes, 59 seconds We're excited with our pipeline of new products and upcoming projects that are set to contribute to growth in a meaningful way. 5:06 5 minutes, 6 seconds In addition, we're actively expanding into newer applications to broaden our market presence and diversify our customer base. 5:15 5 minutes, 15 seconds For the quarter ended June 30th, 2025, Deepak Nitrite reported a revenue of 5:21 5 minutes, 21 seconds 1897 crores, mainly driven by steady volumes, improved product mix, and realization gains in phenolics. 5:30 5 minutes, 30 seconds This came on the backdrop of a challenging external environment despite pricing pressures in the AI segment. 5:38 5 minutes, 38 seconds Consolidated Eida stood at 197 crores marking an 11% sequential rise with 5:45 5 minutes, 45 seconds margins expanding by about 100 basis points to 10% quarteron quarter. 5:51 5 minutes, 51 seconds This was a result of improved operating leverage from sustained volumes and enhanced operational uh efficiencies 5:59 5 minutes, 59 seconds from our optimization and process recalibration efforts. 6:03 6 minutes, 3 seconds PBT was at 138 crores up 17% sequentially demonstrating resilient operational momentum. These numbers are 6:12 6 minutes, 12 seconds excluding government incentives that we've received. So 17 crores in Q1 and 6:18 6 minutes, 18 seconds 161 crores in Q4 which was a sum total of about two years respectively. 6:27 6 minutes, 27 seconds The standalone Deepuk nitride revenue was 620 crores lower by 7% quarteron 6:34 6 minutes, 34 seconds quarter. A bit declined to 41 crores primarily due to a delayed uptake of key products in the ACTM intermediate space. 6:47 6 minutes, 47 seconds However, we anticipate a recovery in the ensuing period. In addition, we're driving targeted initiatives to enhance 6:55 6 minutes, 55 seconds our competitiveness by adding new customers through a diversification effort and into new geographies. 7:02 7 minutes, 2 seconds We've seen initial improvements in the margin trends in the non-ACM space. 7:08 7 minutes, 8 seconds These trends along with our strong customer relationship position us well for a sustained recovery. Also, the benefits from backward integration will 7:16 7 minutes, 16 seconds enhance supply security and cost optimization even amidst global over capacity and pricing challenges. 7:25 7 minutes, 25 seconds By implementing strategic initiatives, we have successfully expanded our product portfolio which is expected to generate incremental annualized revenue. 7:35 7 minutes, 35 seconds This growth will be driven by the commercialization of a new value stream integrated product for the diet and cosmetic segment and 7:44 7 minutes, 44 seconds the launch of a new product through a long-term co-manufacturing agreement. 7:49 7 minutes, 49 seconds Overall, these targeted efforts will enhance our market presence including untapped geographies opportunities 7:57 7 minutes, 57 seconds thereby creating new avenues for sustainable growth. This is by the way done with existing assets and negligible 8:04 8 minutes, 4 seconds investment. And while we may have launched these products in the middle of the year, they are going to be tested by 8:11 8 minutes, 11 seconds customers for stability. and then we will be available to be able to supply commercial volumes when the next contractual cycle begins. 8:22 8 minutes, 22 seconds This is expected to be in the beginning of CY 2026 meaning January. 8:28 8 minutes, 28 seconds The phenolic segment delivered a revenue of 1,287 crores marking a sequential degrowth of 8:36 8 minutes, 36 seconds 6%. Profitability was higher due to various cost optimizations 8:43 8 minutes, 43 seconds and a stable sales volume and improving spreads. This was further bolstered by operational efficiencies at the plant. 8:51 8 minutes, 51 seconds The segment's resilience reinforces the strength of our integrated approach. 8:57 8 minutes, 57 seconds We're progressing well on key projects that will enhance our backward and forward integration, strengthening our competitive advantage. Our concentrated 9:06 9 minutes, 6 seconds nitric acid plant is in trial production phase while for the weak nitric acid 9:13 9 minutes, 13 seconds commissioning activities are ongoing with the technology partner at site and and are expected to be commissioned within this quarter. 9:23 9 minutes, 23 seconds Commissioning of both of these plants will significantly strengthen Deepak Group's manufacturing capabilities for all nitrationbased products. 9:31 9 minutes, 31 seconds By scaling up production and enhancing backward integration, we will secure a more reliable and predictable supply 9:39 9 minutes, 39 seconds chain for our key raw materials. This will not only boost operational efficiency and reduce reliance on external suppliers but will also 9:47 9 minutes, 47 seconds solidify our market leadership as an ammonia to a mines supplier and reinforce our commitment to import 9:56 9 minutes, 56 seconds substitution ensuring a more resilient foundation for long-term growth. Now building on our extensive expertise in hydrogenated aromatics and 10:04 10 minutes, 4 seconds non-aromatics, we have started trial production at our new hydrogenation facility significantly expanding our group's production capacity. 10:15 10 minutes, 15 seconds This strategic move directly supports the expansion of our product portfolio and better positions us to meet with glo grow growing global demand for high 10:23 10 minutes, 23 seconds value specialtity chemicals. This new facility will not only enhance our operational scale but also our position 10:30 10 minutes, 30 seconds as a key player in this critical segment while integrating well with our already commissioned florination assets. 10:39 10 minutes, 39 seconds Our advanced solvent MIBK, MIBC and others and nitration plants are expected to be commissioned in the next quarter. 10:50 10 minutes, 50 seconds This move will significantly strengthen our downstream integration, allowing us to capture more value from our existing 10:57 10 minutes, 57 seconds product lines and reduce our reliance on external suppliers. 11:02 11 minutes, 2 seconds We are prioritizing resilience by effectively managing resources and adapting our processes to meet with 11:09 11 minutes, 9 seconds these demands in the face of market challenges for our core agrochemical products. We've demonstrated operational 11:17 11 minutes, 17 seconds agility by proactively repurposing our assets. This capital efficient approach allows us to co-develop and produce 11:25 11 minutes, 25 seconds alternative higher value products in close collaboration with our other customers. The strategy not only 11:32 11 minutes, 32 seconds diversifies our portfolio but drives new growth without requiring meaningful capex. 11:39 11 minutes, 39 seconds Our transition to renewable energy is already delivering results. During Q1, we have seen short-term benefits through 11:47 11 minutes, 47 seconds strategic tie-ups. And in order to attain our long-term goal of sourcing 60 to 70% of energy from renewables 11:57 11 minutes, 57 seconds by FY27, we have signed a PPA which will lead to significant cost savings starting from May 2026. 12:06 12 minutes, 6 seconds Overall, this initiative is projected to reduce our CO2 emissions by an estimated 60 to 65%. 12:16 12 minutes, 16 seconds India's first integrated polycarbonate project aims to produce 165,000 metric tons of polycarbonate 12:24 12 minutes, 24 seconds annually. A key part of the strategy is backward and forward integration from propylene which will be supplied from a feed stock of LPG. 12:36 12 minutes, 36 seconds The chain of products will include from propane to phenol and acetone, bistphanol A and polycarbonate resins. 12:45 12 minutes, 45 seconds In line with this, the company is also expanding its phenol and acetone capacity to serve as raw materials for bisphenol A which will also in turn be an intermediate for polycarbonates. 12:56 12 minutes, 56 seconds And we have already entered into the polycarbonate compounding business with an invested asset in Boda. 13:05 13 minutes, 5 seconds This holistic approach which leverages existing expertise and a technology license from Trenziel positions deep 13:13 13 minutes, 13 seconds nitrite to be a highly integrated producer reduce India's reliance on imports and secure a predictable supply chain for its downstream products. 13:23 13 minutes, 23 seconds Polycarbonates are highly versatile product range that are used widely in various applications and industries due 13:30 13 minutes, 30 seconds to very unique properties including high impact resistance, transparency, heat resistance and weight. 13:39 13 minutes, 39 seconds They are used in sectors such as electrical, automobile, medical devices and now increasingly also in defense and drone manufacturing. 13:49 13 minutes, 49 seconds This integrated complex is expected to start commercial operations by December 27. 13:55 13 minutes, 55 seconds Deepak Nitrite is committed to expanding its integrated product portfolio and deepening market penetration with investments of around 10,000 crores over 14:05 14 minutes, 5 seconds the next three years in operations spanning seven manufacturing plants across India serving more than 50 14:12 14 minutes, 12 seconds countries. were well positioned to deliver long-term value and contribute also to India's self-reliance. 14:19 14 minutes, 19 seconds To summarize, Q1 has demonstrated challenges and opportunities which have tested our strategic ability amid global uncertainties. 14:30 14 minutes, 30 seconds Our focus on import substitution, integration, innovation and sustainability continue to drive operational performance. We profusely thank our 14:39 14 minutes, 39 seconds employees, partners and stakeholders for their continued trust and support as we work towards realizing a vision of 14:46 14 minutes, 46 seconds creating a stronger, self-reliant and prosperous India. 14:52 14 minutes, 52 seconds Potential US tariffs are expected to have a moderate impact on our business given that our exposure to the US is 15:00 15 minutes limited to 2.5 to 3% at a consolidated level. 15:05 15 minutes, 5 seconds We are taking proactive steps to negate this by expanding into new markets. 15:10 15 minutes, 10 seconds Additionally, we're maintaining close communication with our customers and closely monitoring this unpredictable 15:18 15 minutes, 18 seconds environment. More importantly, this will help increase our exposure to Bhat in line with the Vix Bat initiative. 15:28 15 minutes, 28 seconds Overall, we remain committed to delivering a long-term value to our stakeholders through responsible growth, operational excellence, and a 15:36 15 minutes, 36 seconds sustainable future. Thank you. We look forward to building on the strong foundation in the coming years. With this, I would now like to hand the call 15:45 15 minutes, 45 seconds over to Mr. Sanjay Upady, who will address this forum and take you through the financial performance and key updates during the period under review. 15:56 15 minutes, 56 seconds Thank you, Malik. Good afternoon everyone and thank you for joining this call today. I'll now walk you through the key highlights of financial results for the first quarter ended June 30th. 16:08 16 minutes, 8 seconds In the first quarter of FI26, we achieved stable operational performance on quarteronquarter basis. 16:15 16 minutes, 15 seconds This was predominantly driven by sustained volumes, better pricing in phenolics as well as cost optimization initiatives. 16:22 16 minutes, 22 seconds Despite persistent pricing pressure and softer demand in agrochangal intermediates, our legacy portfolio as well as finally stayed resilient and 16:30 16 minutes, 30 seconds maintained volumes. As hinted by Mik, we anticipate demand in agro intermediates in the upcoming quarter. 16:38 16 minutes, 38 seconds Meanwhile, demand in other end applications like dy, pigments, detergents, glass and home, personal care, etc. remains steady. Our avatar 16:48 16 minutes, 48 seconds showed marked improvement benefiting from greater operating leverage due to steady volumes and along with ongoing cost control and efficiency measures. As 16:58 16 minutes, 58 seconds we advance, we believe that strategic steps we have undertaken will accelerate our recovery and enhance profitability in the coming period. 17:07 17 minutes, 7 seconds uh financial overview. On the revenue front, our domestic sales totaled at 1,623 crores in Q1 complemented by 17:15 17 minutes, 15 seconds export revenue of 267 crores. This resulted in consolidated domestic to export revenue ratio of 86 to 14 for the 17:23 17 minutes, 23 seconds quarter. In alignment for import subsidation strategy, our keen focus on the domestic market provides a stable 17:30 17 minutes, 30 seconds buffer against geopolitical shocks. This not only insulates us from the external volatility but also ensures a more 17:38 17 minutes, 38 seconds consistent demand trajectory and revenue stream forming a predictable and resilient foundation of our long-term business stability. 17:46 17 minutes, 46 seconds Consider revenue declined by 7% quarteron quarter to 1,897 crores. Abita 17:53 17 minutes, 53 seconds grew by 11% to 197 crores compared to 178 crores in Q4 FI25 with margin expansions at 10%. 18:03 18 minutes, 3 seconds Profit before tax improved by 17% reaching at 138 crores. With a positive outlook ahead, we expect performance to 18:11 18 minutes, 11 seconds improve as damage stabilizes as demand stabilizes. Keep projects come online and cost efficiency initiatives gain 18:19 18 minutes, 19 seconds further momentum positioning us for consistent profitability in the period ahead. Total income every time PBT 18:27 18 minutes, 27 seconds exclude excluding government incentive amounting to 17 crores in Q1 FI 161 crores in Q4 FI25 respectively. 18:36 18 minutes, 36 seconds Segmental performance highlights the advanced intermediate segment delivered revenue of 65 crores in Q1 FI26 lower by 18:45 18 minutes, 45 seconds 7% from 654 crores in Q4 FI25. 18:50 18 minutes, 50 seconds A bit stood at 35 crores yielding margin of 6%. In addition to ongoing record this was impacted due to certain 18:58 18 minutes, 58 seconds pre-operative expenses of projects nearing commissioning at DCTL. 19:03 19 minutes, 3 seconds Our final business showed at resilience posted a operational revenue 1,287 19:09 19 minutes, 9 seconds crores from 1,00 uh 371 crores in the prior quarter Q4 uh in Q4 and decline of AIT was 19:19 19 minutes, 19 seconds uh 6% uh in the turnover and uh ait was 101 crores uh reflecting a operational margin of 8%. 19:32 19 minutes, 32 seconds Favorable demand dem ensured volume stability as well as better pricing simultaneously. We achieved cost optimization by effectively managing our 19:40 19 minutes, 40 seconds variable expense. A bit grew by 29% during the period. Strategic growth and innovation on that front. We continue to 19:48 19 minutes, 48 seconds advance our long-term growth strategy which includes launching our new speciality chemical manufacturing gravity each year leveraging our strong 19:57 19 minutes, 57 seconds R&D capabilities. We are focused on developing differentiated products that will expand our speciality chemical portfolio. The new capacities will 20:05 20 minutes, 5 seconds enhance our self-reliance on critical raw materials contribute to margin improvements as they scale up. Our state-of-the-art R&D 20:12 20 minutes, 12 seconds center near Wordra which is expected to commission soon will play a pivotal role serving innovation growth. 20:21 20 minutes, 21 seconds Although the quarter present an external headwinds, we remain optimistic about our future process with a healthy project pipeline, a steadfast commitment 20:29 20 minutes, 29 seconds to operational excellence and improving market conditions. Deep nitrate is well positioned to achieve sustainable growth 20:36 20 minutes, 36 seconds and deliver lasting value to our SOA shareholders. With that, I would now request moderator to offer open open forum question of the session, please. 20:45 20 minutes, 45 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 20:53 20 minutes, 53 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a 21:00 21 minutes question. Ladies and gentlemen, we'll wait for a moment while the question assembles. 21:08 21 minutes, 8 seconds The first question is from the line of Sanes Chen from ICIC Securities. Please go ahead. 21:14 21 minutes, 14 seconds Yeah, good afternoon sir. Thanks for taking my questions. First on the agro chemical side can help us understand 21:22 21 minutes, 22 seconds what's really think it is lower demand because restocking appears to be largely behind for the conventions of the 21:28 21 minutes, 28 seconds innovator. Uh or it is China over supply because China still continues to add a lot of capacity. So that issue doesn't 21:38 21 minutes, 38 seconds look like going away very soon. So what gave us confidence that we should see a much better recovery going? 21:50 21 minutes, 50 seconds Okay. Did you have another question also? I can answer them together. Okay. Then I will ask all the questions. 21:56 21 minutes, 56 seconds Thanks to answer that. Uh so second on the uh you said that volume was steady that means uh we did we had on a 22:05 22 minutes, 5 seconds standalone basis particularly in AI uh was the volume slattish uh uh that mean 22:13 22 minutes, 13 seconds agrochemical has declined uh what should be the growth rate for that non-aggrochemical segment uh particularly some of our key product 22:21 22 minutes, 21 seconds like sodium nitride OBA how is that will evolve question that's number six Number 22:28 22 minutes, 28 seconds three on the value creation and the agrochemical value chain which you spoke about last quarter that you intend to 22:36 22 minutes, 36 seconds move up in the value chain. uh where are we in that effort and that uh when should we see uh benefit of that going 22:44 22 minutes, 44 seconds on and the lastly on the new product commission we were looking at the propos thank you 22:51 22 minutes, 51 seconds okay thank you for the questions I'll answer the first one first uh yes China has had uh you know it has ramped up its 23:00 23 minutes uh capacity uh significantly but most of that capacity that has been ramped up is for 23:07 23 minutes, 7 seconds the final product which goes into formulation. We are a an intermediates manufacturer. 23:13 23 minutes, 13 seconds So what's important is that uh we focused on seeing what we can do to optimize our cost structure as well as 23:21 23 minutes, 21 seconds our affluent footprint and on both of these uh along with our quality I think we stand out as uh the best in the world 23:31 23 minutes, 31 seconds and this has also been given as feedback by customers. Now the Chinese market is also open to us to supply albeit at 23:40 23 minutes, 40 seconds perhaps lower realization if we choose to take it. Now uh that choice remains 23:47 23 minutes, 47 seconds ours and we will engage with all uh potential customers both in in India in Europe as well as in China to optimize 23:56 23 minutes, 56 seconds our uh customer mix. That way we will ensure that we are dris from a geographical perspective. uh these 24:04 24 minutes, 4 seconds products continue to remain extremely desired in terms of their effectiveness and efficacy at the farm level. Now that 24:13 24 minutes, 13 seconds said, we have also worked to see how we can engage with partners and uh see 24:22 24 minutes, 22 seconds where we can go downstream to further optimize our value offering. 24:27 24 minutes, 27 seconds In a couple of the plants, we have made sure that we are able to run multiple products in discrete chains. Now, in 24:34 24 minutes, 34 seconds these ch uh discrete streams, now these products because we're literally in the middle of the year at the moment. What 24:41 24 minutes, 41 seconds we have worked with uh strategic customers for is uh plant pilot batches, 24:48 24 minutes, 48 seconds which are roughly about 20 or 30 tons in terms of volume. in order to be able to qualify for contractual agreements which 24:56 24 minutes, 56 seconds would start with meaningful volumes from January uh onwards. 25:02 25 minutes, 2 seconds So these are certain steps that we have taken to not only derisk from x particular product but also from x particular customer. 25:12 25 minutes, 12 seconds I think uh we will uh see a meaningful improvement because uh orders delayed 25:18 25 minutes, 18 seconds are not orders declined and meanwhile we will see what we have to do in order to make our assets multi-purpose in 25:27 25 minutes, 27 seconds campaigns to be able to run along with customer requirements with your uh second question which I'm answering last 25:34 25 minutes, 34 seconds regarding the volumes now uh frankly on the other products which are going more into the dies is an intermediate space. 25:43 25 minutes, 43 seconds I think there our volumes are largely intact with uh you know a marginal growth. 25:51 25 minutes, 51 seconds It's only that uh and also uh by the way in uh our PP our optical brighteners and intermediates there also we have seen a 25:59 25 minutes, 59 seconds growth in line with our debottlenecking efforts. 26:03 26 minutes, 3 seconds the uh agrochemical products uh have had a temporary blip as I mentioned some of them which would be higher margin have 26:11 26 minutes, 11 seconds had a deferment of uh supply from our customers which we are working to see how to address. So all in all I would 26:19 26 minutes, 19 seconds say that the net impact on volume is not substantial but there has been of course a net impact in terms of profitability 26:29 26 minutes, 29 seconds and we're seeing what we can do to cover that for the rest of the year. 26:34 26 minutes, 34 seconds Thanks that's takes you here and very thanks very much and thank you. 26:43 26 minutes, 43 seconds Thank you. The next question is from the line of Nrahares Chimodia from Anvil Wealth. Please go ahead. 26:50 26 minutes, 50 seconds Yes sir. Thanks for the opportunity and uh thanks for the detailed presentation. 26:54 26 minutes, 54 seconds So I have two questions. So first is on u an investment of close to around 220 crores which were mentioned in the 27:01 27 minutes, 1 second annual report to manufacture a key agrochemical intermediate for us for into specialty fochemicals. 27:09 27 minutes, 9 seconds So if you can uh share your views here like is this for a uh novel agrochemical or uh or for this is for the off patent 27:18 27 minutes, 18 seconds product uh some estimates on the market potential and uh when can we see the full benefit of this investment acrewing to us? 27:28 27 minutes, 28 seconds Okay so first of all NRA thanks for the question. Uh just to clarify the investment of 220 crores is in its uh 27:38 27 minutes, 38 seconds construction phase and expected to be commissioned uh at some point between the uh end of January and uh the middle 27:47 27 minutes, 47 seconds of March. We're engaging with customers just also to highlight that while uh the primary customer for this would be an 27:56 27 minutes, 56 seconds agrochemical major uh for a product which is under patent and our process also would be under uh uh this thing intellectual property control. 28:09 28 minutes, 9 seconds The plant is designed in such a way that it doesn't necessarily only have to make that. It will also be able to supply to 28:17 28 minutes, 17 seconds the cosmetics industry as well as the polymer industry. Both of which appreciate the higher quality as well as 28:25 28 minutes, 25 seconds the considerably reduced uh carbon footprint that this process will allow us to uh put on the table. So this 28:33 28 minutes, 33 seconds technology as well as this plant is probably the first and only of its kind and it leverages two key strengths of uh 28:41 28 minutes, 41 seconds the company. So the mode is uh significant. 28:47 28 minutes, 47 seconds Got it. Uh is there any timelines of uh the launch of this product by the innovator because probably or possibly 28:54 28 minutes, 54 seconds in the earlier phase we'll be supplying some of the samples to them and then once that is launched uh the sales could 29:01 29 minutes, 1 second have been ramped up from them. So any tentative schedule have been given by the innovator to you in terms of uh the launch by them. 29:11 29 minutes, 11 seconds So this uh product will be supplied as quote unquote a uh plant relevant uh 29:18 29 minutes, 18 seconds batch in quarter three and in time for us to be able to engage with them meaningfully for uh you know long-term 29:26 29 minutes, 26 seconds contracts moving forward. But as I also mentioned uh the asset will be funible for us to use in other applications. 29:34 29 minutes, 34 seconds They're also we are engaging with uh customers. They're also we are ensuring that we are using this opportunity to 29:41 29 minutes, 41 seconds supply small plant relevant uh batches for them to test. In uh some of these applications there is also you know 29:49 29 minutes, 49 seconds things like stability testing and all of those things. But in all of the cases whether it is for cosmetics, whether it is for advanced polymers, whether it is 29:58 29 minutes, 58 seconds for hydrochemical intermediates, in all the three spaces the customers have uh 30:04 30 minutes, 4 seconds definitely reverted back very very positively with regards to our industry-leading specifications and 30:10 30 minutes, 10 seconds purity. So on that front, our product is uh a benchmark. Now we have to make sure 30:18 30 minutes, 18 seconds that we are able to supply the products and run them in campaigns as efficiently as possible. 30:24 30 minutes, 24 seconds Correct. So just a last clarification on the answers given by you. uh this product which we are going to supply uh 30:33 30 minutes, 33 seconds uh is it safe to assume that it would be backwardly integrated in the sense that uh it would use most of the bouquet of 30:41 30 minutes, 41 seconds products which we are currently manufacturing and this is a kind of forward integration going to the customer through the bouquet of products 30:48 30 minutes, 48 seconds what we are already having so you are uh partially correct but also I'll highlight that this plant the 30:57 30 minutes, 57 seconds protected IP is the process not the product. So the same plant will be able to make multiple products using a 31:05 31 minutes, 5 seconds process which will be uh intellectually protected by deep using a common set of strengths. So you change the raw 31:15 31 minutes, 15 seconds materials from A to B, you're able to make a product which goes into a different application. 31:20 31 minutes, 20 seconds And in most of these cases there is significant synergy with our core competencies and in two cases a 31:27 31 minutes, 27 seconds significant synergy also with uh deep manufacturing the upstream product. I hope this helps. Got it sir. The second 31:34 31 minutes, 34 seconds question is on u the EGM like uh the chairman sir mentioned about projects worth 14,000 crores under pipeline. If 31:44 31 minutes, 44 seconds I'm not wrong, some turnover figure of 7,000 cr was also mentioned on this investments. Uh if I recall it 31:52 31 minutes, 52 seconds correctly, we are undergoing 8,500 crores of capex plus 2,000 crores of capex which is under various stages of 32:00 32 minutes commissioning. So for the rest of the projects uh are the products finalized and uh what sort of uh uh integration it 32:10 32 minutes, 10 seconds would help with the existing line of products what we already have. Thanks so much. 32:15 32 minutes, 15 seconds Okay. So, uh couple of points just to highlight many of the products uh that are being uh 32:23 32 minutes, 23 seconds which are in the process of commissioning whether it is products like MIBK, MIBC, whether it is nitric 32:29 32 minutes, 29 seconds acid um those are already part of this and they're in various stages of commissioning. There was something that 32:37 32 minutes, 37 seconds was uh commissioned a year and a half ago which was a florination asset. Uh there is something which is in the 32:45 32 minutes, 45 seconds process of being commissioned in uh this particular quarter that we are referring to and some more which is being 32:52 32 minutes, 52 seconds commissioned in uh Q3 which is in uh the mechanical completion and pre-commissioning stage. Right? So all 33:00 33 minutes of these put together then uh over and above this uh what we're talking about with regards to 33:07 33 minutes, 7 seconds 8,000 crores of revenue is uh to keep in mind that when we make phenol acetone binol 33:15 33 minutes, 15 seconds these will be largely fed into the manufacturing of polycarbonate. So they will be able to acrewue a higher uh rosi and an eida percentage. 33:26 33 minutes, 26 seconds So it should be looked at in line with that that all the investment when you look at a backward integration does not 33:33 33 minutes, 33 seconds result in a topline as high as you know if it was just a downstream investment but it builds a significant amount of 33:41 33 minutes, 41 seconds resilience and uh we are able to leverage that to create uh you know long-term agreements with our customers. 33:51 33 minutes, 51 seconds One of those customers uh incidentally also being the company that we are acquiring the license as well as the 33:57 33 minutes, 57 seconds plant and assets from Thank you so much sir and wish you all the best. 34:06 34 minutes, 6 seconds Thank you so much. 34:07 34 minutes, 7 seconds Thank you. The next question is from the line of Abija Kala from KC Institutional Equities. Please go ahead. 34:16 34 minutes, 16 seconds Good afternoon. Thank you so much for taking my questions. Um just a few uh updates on some of the key projects if uh if it's possible to share. Um so just 34:26 34 minutes, 26 seconds on nitric acid should we expect the benefits to start from the second quarter of uh this financial year or will it uh you know really start from 34:34 34 minutes, 34 seconds the third quarter and uh could it um add something like 200 300 bits to the advanced intermediate segment margin. Is that a fair estimate to have? 34:46 34 minutes, 46 seconds Uh yes, I think in terms of the margin expectation, you're right. 34:51 34 minutes, 51 seconds And uh just to clarify, since we're in the middle of uh the second quarter, uh we've already begun trial production uh 34:59 34 minutes, 59 seconds and we've already started the commissioning activities for the uh WNA asset integrated. Both of these will be 35:08 35 minutes, 8 seconds commissioned and online on stream for their desired capacity by the end of Q2. 35:16 35 minutes, 16 seconds If we're able to take advantage uh of some uh volume as the trial production commences of course there will be that 35:24 35 minutes, 24 seconds benefit which is accured but meaningful uh and consistent benefit will be accured from the beginning of Q3 onwards 35:31 35 minutes, 31 seconds at infinitive and your yes it will add to AITA 35:40 35 minutes, 40 seconds uh maybe about two to three% what you mentioned that's Uh also I'll just highlight that while 35:48 35 minutes, 48 seconds we have been constructing this we have also invested in expansion of our nitration capabilities across multiple 35:56 35 minutes, 56 seconds location. So we will be able to consume more of what we make as compared to what we had originally 36:04 36 minutes, 4 seconds anticipated. So uh fortunately unfortunately whatever you want to call it our uh nitration and reduction 36:12 36 minutes, 12 seconds capacities have been able to come on stream with trial production in one place and uh commissioned in other 36:19 36 minutes, 19 seconds places a little bit earlier than the nitric acid plant. But the good thing is that uh a market presence is already 36:27 36 minutes, 27 seconds established and we should be able to uh you know hit the ground running once uh these assets are fully commissioned. 36:35 36 minutes, 35 seconds Thank you. That is helpful. Uh and then on the uh MIBK MIBC project, uh we've mentioned 2H of fiscal 26 as the 36:44 36 minutes, 44 seconds commissioning timeline. Um so realistically, what sort of capacity utilization uh you know percentages could we work with for this financial year and then maybe next financial year? 36:56 36 minutes, 56 seconds I think there will be uh a ramp up. It's going to be an accelerated ramp up to a sense because uh not only will we be 37:05 37 minutes, 5 seconds making MIBK but we'll be making the downstream of that MIBC and a couple of other uh solvents and mining chemicals 37:12 37 minutes, 12 seconds as well. So the capacity ramp up will be uh you know for I think four three or 37:20 37 minutes, 20 seconds four products all together in line with MIBK. So the answer to that is a little bit challenging. It is going to be an 37:28 37 minutes, 28 seconds accelerated ramp up. It is not going to be something that takes like a year to do. It's going to be months. But we will do it in line with uh customer approvals 37:38 37 minutes, 38 seconds because two out of these products also have uh significant consumption in the cosmetic space where there is a higher 37:47 37 minutes, 47 seconds price and higher margin expectation. But for that you have a longer lead time for validation. So we've already started 37:55 37 minutes, 55 seconds production of some of these or we're starting production within the month to uh seed market it from another location 38:03 38 minutes, 3 seconds and we are ensuring that we are able to move forward with this validation before the uh much larger plant uh comes into 38:12 38 minutes, 12 seconds production. Hopefully this will allow us to accelerate our uh meaningful supplies to these segments as well. If not uh 38:20 38 minutes, 20 seconds then there will be a couple of months of lag where their validation cycles and uh stability studies are in the terminal stages of uh approval. 38:35 38 minutes, 35 seconds Understood. Thank you so much. Um on the polycarbonate compounding facility which is up and running at present uh are 38:42 38 minutes, 42 seconds there meaningful contributions expected for this year in terms of uh revenues or maybe profits as well? 38:49 38 minutes, 49 seconds I think uh frankly what you should look at is not so much uh for this year. It's more about what we're able to accelerate 38:57 38 minutes, 57 seconds on over the next year two years. I mentioned much earlier this asset while it will have contribution and revenue is 39:05 39 minutes, 5 seconds not expected to be I mean it's a strategic investment to fasttrack uh our 39:13 39 minutes, 13 seconds approval cycle. So it is to be looked at as if it is a very large scale pilot project and it allows us to move forward 39:21 39 minutes, 21 seconds the validation uh cycles. Many of these uh end applications have validation cycles which are more than 18 months 39:30 39 minutes, 30 seconds long. So we've just started that uh a few months ago. And if you look at 18 months then you should not look at a 39:39 39 minutes, 39 seconds meaningful contribution if and when that happens during the year certainly it'll be uh we we'll appreciate it but it will 39:49 39 minutes, 49 seconds you know allow us to run the polycarbonate resin plant when it is uh commissioned all the way to 100 without 39:57 39 minutes, 57 seconds at that time waiting for 18 months of qualification. 40:04 40 minutes, 4 seconds Got it. Got it. Um so ju just to round up on the advanced intermediate segment u obviously profitability has been weak 40:12 40 minutes, 12 seconds for the last couple of quarters but with all these uh with the backer integration now coming up nitric acid plus the new products uh you know and the contract 40:19 40 minutes, 19 seconds manufacturing uh initiatives. Um is there a uh can we expect to sort of get back into double digit uh you know eBick 40:28 40 minutes, 28 seconds margins maybe sometime next year or so would is that sort of how we are massaging it. Yeah, in fact uh you know 40:36 40 minutes, 36 seconds if the uh orders from our strategic customers had not been delayed deferred uh we would have been able to see that 40:44 40 minutes, 44 seconds even in Q1. But the unfortunate truth is that uh this is a situation that prevailed uh despite our best efforts. 40:54 40 minutes, 54 seconds So yes uh but of course I will just highlight that many of these products that we're talking about like nitric 41:00 41 minutes acid happen to be in deep chem. So uh you know the profits as they are will be booked in the company where they're 41:08 41 minutes, 8 seconds manufactured and as a group we will be of course able to take advantage of that the deep nitrite standalone ebit 41:16 41 minutes, 16 seconds percentage should be able to improve uh steadily over a period of time but from that perspective I would rather focus on 41:24 41 minutes, 24 seconds the eida of the group rather than the standalone. 41:29 41 minutes, 29 seconds uh but Abiji to answer your question it will be a part of AI segment only so AI segment will certainly certainly show 41:37 41 minutes, 37 seconds the improved AITA at at a console level sure I understood that thank you um just 41:46 41 minutes, 46 seconds last two quick things from me um and I'll get back in the queue one is on the capex budget for this year last time we 41:52 41 minutes, 52 seconds had mentioned 1500 crores for fiscal 26 so is that still on track and uh then Guess we need to you know incur pretty 42:01 42 minutes, 1 second much the entire 10,000 crores over uh by fiscal 28. So you know the next two years should we expect the remaining amounts to be spent? 42:11 42 minutes, 11 seconds Uh this year it would be in the range of uh 800 to,000 crores roughly 42:19 42 minutes, 19 seconds and uh 500 500 already spent. 42:24 42 minutes, 24 seconds So next year will be a significant amount. uh I out of the whatever new 42:31 42 minutes, 31 seconds capacities what we have announced so around 3,000 3,000 42:40 42 minutes, 40 seconds yeah around 1,000 we have already spent this will be around 3,000 and around 5,000 and the balance just how it will 42:49 42 minutes, 49 seconds be um so sorry uh 1,000 grows this year and 42:57 42 minutes, 57 seconds then 3,000 odd in 27 and the balance in 28. Is that correct? 43:03 43 minutes, 3 seconds Yeah. Yeah. But some portion goes to the next year also because you don't pay if you're talking of cash out. I'm mentioning about cash out not the actual 43:11 43 minutes, 11 seconds capes in the balance sheet. I think there's some disc see cash outflow happens to subsequently also post project completion. 43:24 43 minutes, 24 seconds Okay. Okay. Got it. Appreciate that project will be completed by dates what 43:31 43 minutes, 31 seconds we have given by 28 but cash outflows can happen in the next year also can it will happen because there are some 43:39 43 minutes, 39 seconds guarantees and warranties and whatever you know the creditors and LC's 43:46 43 minutes, 46 seconds right okay just one last thing from me on the topic of tariffs um so you know 43:54 43 minutes, 54 seconds uh I guess we do have significant exposure to some industries like say textiles for example or I don't know 44:02 44 minutes, 2 seconds maybe even you know autos or auto ancillaries or something else which are export oriented and uh which are believed to possibly face some uh headwinds of the tariffs in from the US. 44:13 44 minutes, 13 seconds Um so Malik would appreciate your assessment of uh you know how how you're seeing the scenario and of what possibly 44:21 44 minutes, 21 seconds the repercussions could be and how we could mitigate any such challenges. 44:26 44 minutes, 26 seconds I I think honestly anything that I say right now I would look back uh at it within the next month month and a half and uh probably wish I hadn't said it. 44:37 44 minutes, 37 seconds One thing is for sure that uh as a company as an intermediate manufacturer we must not only look at first order 44:44 44 minutes, 44 seconds impact but second order impact as well because our customers uh and their demand pickup is also 44:52 44 minutes, 52 seconds dependent on what is going to happen with this and uh more than that it is also dependent on how uh other companies 45:00 45 minutes are other countries are dealing with uh the same uh geopolitical uncertainty. 45:06 45 minutes, 6 seconds But generally what happens uh during times of uncertainty is one most companies will try to see how to derisk 45:14 45 minutes, 14 seconds their supply base. Two they will try to see how to mitigate their costs by conversing with their suppliers to see 45:22 45 minutes, 22 seconds if uh some of these can be shared. But three there is also an impact which we don't consider of uh you know the uh 45:31 45 minutes, 31 seconds rupee dollar uh devaluation and along with that also is the fact that supply chains are not built overnight. 45:41 45 minutes, 41 seconds They take a lot of investment and time and hence any any impact both positive as well as negative would be uh you know bleeding out over multiple quarters. 45:52 45 minutes, 52 seconds Just because there is a a position and a threat of tariff and an increased tariff at one time does not mean that the sum 45:59 45 minutes, 59 seconds total of the impact is felt within the you know next month or two months. So I will definitely say it's a wait and 46:07 46 minutes, 7 seconds watch approach. I will also say that you know we're not without options and I will also add that our greatest 46:14 46 minutes, 14 seconds investment is into the country of India itself. As I mentioned in the AGM also India is the world's largest economy 46:24 46 minutes, 24 seconds that has a fair balance of supply uh as well as demandled growth and that is 46:31 46 minutes, 31 seconds something that we should harvest and cultivate because that is our true strength and potential. Meanwhile, we 46:38 46 minutes, 38 seconds are working with our customers also in the US to see how we can ensure that they are dearest and we will do it 46:47 46 minutes, 47 seconds without uh allowing for any significant bleed from our uh margins as well as volumes. 46:57 46 minutes, 57 seconds But I'm sorry I'm not able to give you a much clearer answer. Frankly uh you deserve a better answer but this is not 47:05 47 minutes, 5 seconds a time when anyone would be able to give you no sure completely understand that thank you so much I appreciate the responses 47:13 47 minutes, 13 seconds and uh wish you all the best thank you so much thank you the next question is from the line of Toshar from Omega portfolio 47:21 47 minutes, 21 seconds advisor please go ahead yeah good afternoon thank you for the opportunity question more on the DCTL and DPL uh so considering the 9,000 K of PEX uh in the polycarbonate and phenol. 47:34 47 minutes, 34 seconds Uh so considering the imports of near to 5,000 crores and the adjoining imports like epoxy resin and other products uh 47:42 47 minutes, 42 seconds what kind of what what is the size of market uh you are looking at uh to fill the gap and also the end user 47:51 47 minutes, 51 seconds application are so diverse. Uh so just as a uh from the def management how in terms of market size what sort of market 47:59 47 minutes, 59 seconds size you are seeing to uh sorry your voice was not clear we 48:07 48 minutes, 7 seconds couldn't hear clearly somewhere 48:16 48 minutes, 16 seconds hello hello yes mashad Please go ahead. 48:24 48 minutes, 24 seconds Uh I just wanted to know like uh you're doing 9,000 crex uh in DCTL. Uh so 48:34 48 minutes, 34 seconds considering the polycarbonate uh resin import uh and uh the end user markets markets in the polycarbonate what sort 48:42 48 minutes, 42 seconds of market size you are seeing uh you know in order to cater from this uh PC 48:48 48 minutes, 48 seconds compounding facility going forward you are asking about poly government market size India. 48:59 48 minutes, 59 seconds Yes sir. the Indian market size which you are trying to grow by now four lakh metric tons. 49:08 49 minutes, 8 seconds Okay sir. And so uh considering the uh the size of the KP what sort of IRRa and uh in how many is you are seeing that uh 49:16 49 minutes, 16 seconds you know the the the cash flows contributing positively going forward like uh recovering the amount 49:25 49 minutes, 25 seconds the payback is around five years five and a half years between five and five years when you take the entire uh 49:32 49 minutes, 32 seconds integrated value chain you know you cannot be doing it in bits and pieces. 49:36 49 minutes, 36 seconds So it's from fenol 2 to this phenol to phenol it will be entire capex with five five and a half years pay 49:45 49 minutes, 45 seconds 16 to 18 IR fair enough sir and sir in the phenol business like uh one of the major I know 49:53 49 minutes, 53 seconds capacity in Germany which is near about 30% of their capacity is getting shut due to European uh carbon 50:00 50 minutes carbon policy uh any any benefit you are seeing from that in the phenol Fenol if you heard our chairman today 50:10 50 minutes, 10 seconds morning we have expanded capacity even this month also we have reached another uh peak so and we are able to sell the 50:17 50 minutes, 17 seconds entire volume and that's because of these reasons only because India is uh we are one of the integrated players 50:25 50 minutes, 25 seconds that's one thing and secondly India is uh consuming this and uh intermediates in a significant way our demands are 50:34 50 minutes, 34 seconds increasing So we are able to sell the whole that's why we are increasing the capacity when we are putting a polycarbonate also 50:41 50 minutes, 41 seconds because we can't let go the market you know so you can see the numbers and results that is uh demonstrating our 50:50 50 minutes, 50 seconds ability to produce and sell both s like one of the player in you know is 51:00 51 minutes putting up the canal and acetone capacity in India uh and also having a plan to enter into BPA. Do you have do 51:07 51 minutes, 7 seconds you feel any any competition going forward due to that? And second sir would be considering your capacity of 51:14 51 minutes, 14 seconds phenol acetone to cater the polycarbonate. 51:17 51 minutes, 17 seconds Do you have plans to uh you know for the merchant fail in the phenol acetone BPA going forward. 51:25 51 minutes, 25 seconds See by and large this will be captive. 51:27 51 minutes, 27 seconds Uh there is a room for one more player also because the way demand is growing. 51:32 51 minutes, 32 seconds Yes. But our additional capacity comes for a captive consumption largely. 51:38 51 minutes, 38 seconds So there will be of phenol BPA uh which is also sold in the market but 51:45 51 minutes, 45 seconds it'll be a much smaller share of the total capacity. 51:50 51 minutes, 50 seconds Got it. So considering the thumb rule of polyropene and other things like the 165 KTPA I think the capacity can be much 51:58 51 minutes, 58 seconds higher you know uh going forward considering the applications uh you're working on 52:05 52 minutes, 5 seconds I'm not sure what uh thumbros this is this I mean today whatever plan we have 52:13 52 minutes, 13 seconds this is the capacity we are setting up so I mean beyond that today we can't say anything further 52:21 52 minutes, 21 seconds Got it. So my question is basically the the quantity of polyropylene and the BPA is used and the phenol is used to make 52:28 52 minutes, 28 seconds polycarbonate on that front the the there is a huge room of expansion in the polycarbonate. So on that front I'm 52:35 52 minutes, 35 seconds asking post calendar year 27. So what sort of markets you are seeing post? I understand your question but the point 52:43 52 minutes, 43 seconds is let us close 2728 first then we can discuss you know I there is a time you know for you can't jump to this kind of 52:52 52 minutes, 52 seconds discussions now because we are in the process of setting up such a large capex and projects beyond that today we will 53:01 53 minutes, 1 second not be able to answer further expansion on future beyond 27 that will be yeah one thing that I can mention is 53:09 53 minutes, 9 seconds that when there There is an established plant which is integrated with room to 53:16 53 minutes, 16 seconds grow. Further expansion does not take time as fresh greenfield plant and also 53:23 53 minutes, 23 seconds the investment required to expand is you know very very small compared to again a green field asset. 53:32 53 minutes, 32 seconds Okay. Nice question like like Bayer has a subsidiary in India to cater the polycarbonate they import resin. So 53:41 53 minutes, 41 seconds after you post your KX getting commercialized, do you see yourself as the lowest cost producer in India for polycarbonate? 53:49 53 minutes, 49 seconds Bayer uh is not into polycarbonate. You may be referring to yes from Bayer several years ago. uh you 53:59 53 minutes, 59 seconds know we're going to be working with uh a lot of different partners uh in the downstream and uh you can look 54:07 54 minutes, 7 seconds at us as co-producers because we will also be getting into compounding. We will also be partnering on compounding 54:14 54 minutes, 14 seconds with uh various players including with 54:23 54 minutes, 23 seconds just to be clear Bayer uh X Bayer Covestro does not have manufacturing for polycarbonates in India will be the first. 54:34 54 minutes, 34 seconds Got it. Sir and you also mentioned in your book advanced intermediate advanced product subsidiaries that you're working 54:41 54 minutes, 41 seconds up with the ABS plus polycarbonate blend. Uh so just wanted to understand you're having planned to manufacture ABS 54:49 54 minutes, 49 seconds or you have some collaboration with other who are already manufacturing ABS in India. 54:55 54 minutes, 55 seconds The second uh not the not in India we're talking to everybody right now. ABS is massively 55:04 55 minutes, 4 seconds overs supplied uh globally. So there's plenty of options 55:12 55 minutes, 12 seconds of getting into ABS manufacturing but we will be but certainly uh are you planning to 55:20 55 minutes, 20 seconds manufacture epoxy resin uh because it's the 2,000 3,000 K market of imports in India? 55:28 55 minutes, 28 seconds I won't I I won't uh respond to that. 55:31 55 minutes, 31 seconds This is uh something that is being internally evaluated but at the moment I have no comment for 55:39 55 minutes, 39 seconds that's that was really helpful. Thank you. We'll get back in the queue. Thanks. Thank you. 55:45 55 minutes, 45 seconds Thank you. The next question is from the line of Aditi Laora from CD Research Limited. Please go ahead. 55:55 55 minutes, 55 seconds Um sir uh I would like to know that how are you adapting to rising risk of trade war? 56:04 56 minutes, 4 seconds Uh whatever uh adaptation we do then the trade war looks different in the next 56:10 56 minutes, 10 seconds week. So uh the I think honestly the best thing that we are able to do to adapt for a trade war is look within uh 56:20 56 minutes, 20 seconds look at our partners our business partners suppliers and customers all over the world because as I mentioned earlier we are not without options and 56:28 56 minutes, 28 seconds we're not without relationships frankly speaking as I mentioned uh the direct impact that it has on Deepuk's uh 56:36 56 minutes, 36 seconds consolidated business is not substantial but the second order impact fact is 56:42 56 minutes, 42 seconds something that is to be asserted. So, uh no clear answer to give you right now which is worth your time. 56:52 56 minutes, 52 seconds But we are evaluating options and we're engaging with everybody including uh US companies. Let's be clear, companies, 57:01 57 minutes, 1 second our customers, our suppliers, nobody benefits from a trade war. If someone benefits, it may be a government or 57:08 57 minutes, 8 seconds someone else. But customers which are companies prefer uh stability of supply 57:15 57 minutes, 15 seconds and strategic partnerships. So we're navigating into this uh together not alone. 57:26 57 minutes, 26 seconds Uh yeah the situation might uh is unpredictable. I agree. But given the current scenario, what are the options that you have to deal with this? 57:38 57 minutes, 38 seconds uh the options that we are working on our investments for because these options allow us to cater to investments 57:46 57 minutes, 46 seconds uh which are already being planned by the consuming industry within India. So when we are uh investing in something 57:55 57 minutes, 55 seconds which is going to be made uh in India using feed stock that is made in India and consumed by customers in India. This 58:04 58 minutes, 4 seconds is one way that we are working to see how to protect the future of uh deep nitrite's growth trajectory. 58:12 58 minutes, 12 seconds And how will this impact your capeex plan? 58:17 58 minutes, 17 seconds Yes. Uh there's no direct impact to the capeex plan. The capeex plans are as we've already uh delineated them. 58:28 58 minutes, 28 seconds Okay. any change with regards to cost of material of construction and some such I don't know but when we are relocating a 58:37 58 minutes, 37 seconds polycarbonate plant let's keep in mind that significant assets are already constructed and being uh packed and 58:46 58 minutes, 46 seconds brought to India so you don't have to invest in uh you know brand new assets these are very high quality assets 58:55 58 minutes, 55 seconds extraordinarily well-maintained frankly they were they're assets that put up at an expense which today would have been 59:02 59 minutes, 2 seconds prohibitive in the kind of metal energy that they have. So let's just say that we have uh assets which we are able to 59:10 59 minutes, 10 seconds put up which would have cost uh considerably more if we were to invest everything all over again in a brand new plant. 59:21 59 minutes, 21 seconds No. Um uh what I want to understand is like when we make any capex plans we have in mind that uh this plan will 59:28 59 minutes, 28 seconds generate a certain sum of revenue and your major exports uh are in US also. So I want to know that how will uh like 59:37 59 minutes, 37 seconds this impact your capeex as in will you do you have any plans of slowing down capeex if the tariffs are high or 59:44 59 minutes, 44 seconds anything as such? We do not have plans to slow down our capex because of the uh 59:52 59 minutes, 52 seconds tariff war that is ensuring all over the world because our capex plans are very clearly targeted towards supplying our 1:00:00 1 hour product to Indian customers with some amount being supplied to our technology partner who will compound it into their applications in Europe. 1:00:13 1 hour, 13 seconds Okay sir. Thank you. Thank you. 1:00:17 1 hour, 17 seconds Thank you. The next question is from the line of Rohit Nagaraj from BNK Securities. Please go ahead. Yeah. 1:00:24 1 hour, 24 seconds Thanks for the opportunity. Uh sir, on MIBK, MIBC, we said that the ramp up will be relatively faster. Uh in terms of 1:00:33 1 hour, 33 seconds current pricing, what is the uh optimal level of revenues that we are expecting and what are the evida margins that 1:00:40 1 hour, 40 seconds expected from uh the the downstream products? Thank you. 1:00:46 1 hour, 46 seconds Uh give me a minute. Let me just open up uh that. But when you say current pricing, you know, MIBC and MI at least 1:00:55 1 hour, 55 seconds MIBK more than MIBC, the pricing is highly dynamic and volatile. If I look at the last six months and now uh it's 1:01:04 1 hour, 1 minute, 4 seconds uh it's been extremely extremely volatile. So if I'm just to look at MIBK 1:01:11 1 hour, 1 minute, 11 seconds as a standalone product, I'm looking at a merchant revenue of close to about 550 crores. 1:01:18 1 hour, 1 minute, 18 seconds uh and uh let's see because like I mentioned this is very very dynamic 1:01:26 1 hour, 1 minute, 26 seconds right and in terms of eBay margins uh any number we want to put to difficult to say right now uh because it 1:01:34 1 hour, 1 minute, 34 seconds is integrated with the upstream so you know just putting it on a standalone basis uh would not be the right answer. 1:01:42 1 hour, 1 minute, 42 seconds It has to be balanced with uh you know cracks from all the way from you know propane to acetone to MIBK MIBC and the other solvents. 1:01:53 1 hour, 1 minute, 53 seconds Got it. Got it. Uh on the final front so this quarter again we have uh been able to increase the volumes. However the 1:02:01 1 hour, 2 minutes, 1 second margins have uh declined materially both on sequential as well as var basis. So was there any element of inventory 1:02:10 1 hour, 2 minutes, 10 seconds losses on our raw materials and second part? Yeah, sorry just to correct you there. I would 1:02:18 1 hour, 2 minutes, 18 seconds actually say that it is uh quite the reverse of that. The margins have uh improved from what was actually a multi-year low in quarter 4 8 to 11%. 1:02:29 1 hour, 2 minutes, 29 seconds Yeah. So it's been a substantial drop. 1:02:31 1 hour, 2 minutes, 31 seconds However, uh in uh in quarter 1, I would also highlight that two things have happened. One is we've had our highest 1:02:38 1 hour, 2 minutes, 38 seconds ever production, but also our production has been constrained in the same quarter because of the heat wave. Our last 1:02:48 1 hour, 2 minutes, 48 seconds highest production was in the coldest month of the year. So, it is heartening to know that we're capable of making uh 1:02:55 1 hour, 2 minutes, 55 seconds a new high in the hottest month of the year. But the kind of heat wave that took place uh in Gujarat especially in 1:03:02 1 hour, 3 minutes, 2 seconds Dahj was unprecedented for the last I think 50 or 70 years. And uh hopefully with this learning and this experience 1:03:11 1 hour, 3 minutes, 11 seconds as we move through the rest of the year now hopefully into colder months we will be able to maintain this high 1:03:18 1 hour, 3 minutes, 18 seconds production. Uh so just to course correct here in quarter 1 volumes were lower 1:03:25 1 hour, 3 minutes, 25 seconds than they could have been despite having touched a high peak but the cracks were higher than they were in Q4 as I 1:03:33 1 hour, 3 minutes, 33 seconds mentioned multi-year lows in Q4 and there has been at least some level of an improvement in Q1. 1:03:41 1 hour, 3 minutes, 41 seconds Q1 is better than Q4. uh Rohit I don't know how you are saying it is lower because incentive of 161 crores which we 1:03:49 1 hour, 3 minutes, 49 seconds had mentioned that you need to remove from the last quarter then you will know the real uh EITA between Q4 and Q1 1:03:57 1 hour, 3 minutes, 57 seconds as well as 17 in Q1 and 17 in Q1 right got it thanks a lot thank you so much and all the best sir 1:04:05 1 hour, 4 minutes, 5 seconds okay thank you the next question is from the line of TJ Sav from Asian market securities please go ahead 1:04:14 1 hour, 4 minutes, 14 seconds Uh hi good afternoon uh uh thank you for the opportunity. Uh three questions from my side. Uh firstly on the KES plan uh 1:04:21 1 hour, 4 minutes, 21 seconds the second MOU which we had announced of 9,000 crores. So the we also had mentioned about plans of expanding into 1:04:28 1 hour, 4 minutes, 28 seconds MMA PMA and NU. So you can provide some update about these products. Uh secondly 1:04:35 1 hour, 4 minutes, 35 seconds uh I just wanted to know if you can give us uh some color on the peak uh debt levels uh which uh we could see by SY28 1:04:43 1 hour, 4 minutes, 43 seconds and uh thirdly uh on the quarterly numbers uh adjusting for the government incentive scheme from the segment and 1:04:50 1 hour, 4 minutes, 50 seconds revenue of phenolics uh you know removing the uh uh uh government income from the quarter four numbers as well as quarter 1 we see there is a sequential 1:05:00 1 hour, 5 minutes decline of 6% while in the initial remarks who did allude to the fact that you know on the realization we have seen some improvement as well as the volumes 1:05:09 1 hour, 5 minutes, 9 seconds were steady uh during Q1. So what could have led to this uh 6% decline sequentially adjusting for the uh government incentive income? That's it from my side. Thank you. 1:05:25 1 hour, 5 minutes, 25 seconds So the MOU of MM is uh whatever we have announced 8,500 crores that is what the 1:05:32 1 hour, 5 minutes, 32 seconds announcement is. Uh we are very soon we'll be coming up with the uh BPA 1:05:39 1 hour, 5 minutes, 39 seconds announcement also provided our board approves that of course they will approve but uh approval is pending 1:05:46 1 hour, 5 minutes, 46 seconds today. uh MMA we'll come back to you when we decide on that today we have not yet decided so on today the capex plan 1:05:56 1 hour, 5 minutes, 56 seconds is around 11,000 crores if you include BPA also into that plus whatever we have 1:06:02 1 hour, 6 minutes, 2 seconds spent earlier okay so that is the plan on that on capex second question peak level and all these things we will not 1:06:11 1 hour, 6 minutes, 11 seconds cross the threshold peak level of 1.5 around peak when we reach the top 1:06:21 1 hour, 6 minutes, 21 seconds uh but that will be late once the project runs and this the will come back to the normal level of date. So we can 1:06:28 1 hour, 6 minutes, 28 seconds be in the range of say 7,000 7,500 cr we have worked out but it depends on the capacities how we are phasing out what 1:06:36 1 hour, 6 minutes, 36 seconds kind of uh credits and LCS and everything so but roughly it can be in the range of 6 7,000 7,500 crores 1:06:44 1 hour, 6 minutes, 44 seconds considering 11,000 uh capex and what was your third question? 1:06:51 1 hour, 6 minutes, 51 seconds Uh it was on the uh quarterly segmental performance. So if you remove the government incentive income from the Q4 segmental phenolics revenues and the Q1 1:07:00 1 hour, 7 minutes revenues there is also sequential decline of 6%. While in the initial remarks you did highlight that realizations have improved sequentially 1:07:09 1 hour, 7 minutes, 9 seconds while there volumes also have been steady. So what led to the 6% decline which we have seen sequentially excluding the government incentive income? 1:07:18 1 hour, 7 minutes, 18 seconds Yeah. So talking about revenue I I'll answer that. I think uh you may have misunderstood the when we said realization what we were referring to 1:07:27 1 hour, 7 minutes, 27 seconds was the uh the bottom line the EIDA however when we spoke about revenue you're correct that there is a 6% 1:07:34 1 hour, 7 minutes, 34 seconds sequential degrowth after adjusting for the SGST benefit uh the improvement in 1:07:41 1 hour, 7 minutes, 41 seconds the realizations aka the EIDA is because of somewhat of an improvement in the spread as compared to Q4. four. I hope this clarifies. 1:07:53 1 hour, 7 minutes, 53 seconds Uh yeah. Okay. Thank you so much. That was very helpful. Sure. 1:07:58 1 hour, 7 minutes, 58 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. 1:08:05 1 hour, 8 minutes, 5 seconds Thank you. 1:08:09 1 hour, 8 minutes, 9 seconds Thank you. Uh have a good day and thank you for attending the con. 1:08:14 1 hour, 8 minutes, 14 seconds Thank you. Happy uh happy independence day and uh please whatever worries there are about global geopolitics. I think uh 1:08:23 1 hour, 8 minutes, 23 seconds this is a good time to remember that this is a young democracy we've come far. We have a long way to go and uh the 1:08:31 1 hour, 8 minutes, 31 seconds future is actually within us. Thank you. 1:08:36 1 hour, 8 minutes, 36 seconds Thank you on behalf of Capital Services Limited. That concludes this conference. 1:08:41 1 hour, 8 minutes, 41 seconds Thank you for joining us and you may now disconnect your light.